Another reason to start default: The bank will pay you

We’ve written in the past that walking away, strategically defaulting – whatever you want to call it – is no longer as frowned upon as it once was. After all, in 2010, 3 out of every 10 mortgage defaults were homeowners who could actually afford to keep paying. And it’s more than likely the number increased in 2011 and with the incentives banks have recently announced, more will choose to walk away.

For the banks, it’s a cost effective strategy. They can unload the property much faster than battling a foreclosure and it’s less expensive, even with the cash bonuses to homeowners.

In the end, underwater homeowners won’t have a foreclosure on their record, but a less blemishing short sale. However, to get selected for this program by the banks, they start by stopping payments on their mortgage. In essence, they start the process of walking away.

And why not when you have months of no housing payments and a $35,000+ bonus payout at the end to short sell and move dangling in front of you? One So Cal homeowner who’s been living in her home rent free for the past year has gotten a sweet deal:

…the New York-based bank agreed to let her sell her San Marcos, California, home for $592,000 — about $200,000 less than what she owes. The $30,000 will cover moving costs and the rental deposit for her next home. Farley, who is also approved for an additional $3,000 through a federal incentive program, is scheduled to close the deal Feb. 10.

While the bonus amount varies depending on the situation, it’s not tied to the sales price of value of the house. One Phoenix homeowner received $20,000 after selling her home for $32,000. And another homeowner received $48,000.

As part of the crowd that held back and didn’t bite off more than I could chew, it’s hard not to sit and simmer. How about tossing me $35,000 for being a willing buyer on a foreclosure and helping move another house off the bank’s portfolio? As one real estate law firm partner says:

“The idea is that this is relocation assistance,” Berlin said. “But when you’re offering $48,000, obviously it doesn’t cost $48,000 to relocate.”